When the market is down 45% and seems to have no bottom, what's a good way to instill some investor confidence? How about showing faith in the free market by NOT giving Billion$$ to corporate concerns? Today that happened, quite by accident, and the market loved it.
It sure wasn't because the government acted at all like responsible adults. Comrade Obama and his lapdogs Reid and Pelosi are more than happy to use taxpayer moneys to buy influence in corporate America. The problem is that corporate America knows these irresponsible thugs would be awful business partners, and they are becoming more and more wary of the "help" that the government is offering.
So today Citi sent a message that they want no more of what Comrade Obama is offering... and the market enjoyed one of the best days since our November Revolution. Let's hope corporate America wakes up before it's too late.
WASHINGTON (Reuters) - Citigroup Inc Chairman Richard Parsons said on Thursday that the bank does not need any more capital injections from the government and expressed confidence that Citi would remain in private hands.
Asked in an interview with Reuters whether Citigroup needed additional government capital injections, Parsons said: "No, I think actually, particularly with the latest conversion... Citi is actually one of the better capitalized banks in the world."
Parsons was speaking on the sidelines of a Business Roundtable event where President Barack Obama addressed business executives.
The Citigroup leader also brushed aside any prospect of the U.S. government nationalizing the bank.
"I don't think the administration is heading in that direction," Parsons said. "But I have a lot of confidence in the future viability and strength of a privately held Citi."
The Obama administration and regulators including Federal Reserve Chairman Ben Bernanke have said they do not want the government to take full control of the nation's banks.
Citi's shares on Thursday closed 13 cents higher, or 8.4 percent, to $1.67 on the New York Stock Exchange. For the first time, Citi shares fell below $1 on March 5.
The U.S. government said last month it would boost its equity stake in Citigroup to as much as 36 percent through the conversion of up to $25 billion in preferred shares to common stock.
In total, Citi has received $45 billion of taxpayer-funded capital since October. This marked the third attempt by the U.S. authorities to prop up Citigroup in the past five months.
Citigroup is among many financial institutions that have received government bailout money to shore up their capital in a U.S. economy stuck in a recession during the credit crisis.
Earlier this week Citi said it was profitable in the first two months of 2009 and is confident about its capital strength, easing concerns about the bank's survival prospects.
As a precautionary measure U.S. regulators recently began work on a contingency plan to stabilize Citigroup if problems mounted, but no imminent rescue was planned, a person familiar with the planning said on Tuesday. The person declined to be named due to the sensitivity of the discussions.
Citi and other banks are waiting for the U.S. government to announce a plan to absorb soured assets banks are holding on their balance sheet.
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